Diageo set to deliver up to nine per cent profits growth

Guinness and Smirnoff producer Diageo has announced organic net sales growth of six per cent in the three month period ended September 30, 2008.

While the drinks giant's chief executive Paul Walsh said his company would be "alert to the impact" of the recent banking crisis on its customers, he said he expected organic operating profit growth for the coming year to be within the range of "seven to nine per cent". This figure is in line with previous trading periods.

Speaking at the group's AGM today Walsh said: "Although challenging economic trends have affected our business, the strength and diversity of Diageo has delivered a good trading performance in the first quarter.

"While we have not seen significant adverse changes in our markets in the first quarter, we will be alert to the impact the recent dislocation in the financial markets is likely to have on trade customer and consumer behaviour during the rest of the financial year.

"However, based on our current performance we can repeat the guidance we gave in August, for organic operating profit growth for the coming year to be within the range of seven to nine per cent."

Diageo said there had been "no material change in the financial position of the group during the period".

Walsh said the £277m-worth of share repurchases as part of the share buy back programme were the principal reason for the movement in net assets from £4.2bn at 30 June 2008 to £4.1bn at September 30, 2008.